The role that groundwater plays in surface water systems (rivers, wetlands, lakes) has not been adequately considered in most transboundary river basin management initiatives, including the Nile basin, supported by the GEF and other donors. Groundwater supports perennial water supply to many wetlands and stream base flow, which is critical for providing refuge for fauna and maintaining biodiversity. In addition, large wetland areas, such as the Sudd swamp in Sudan, are an important component in the local/regional atmospheric water cycle. In the context of the Nile, the Sudd swamps presently considered to be fed by river water and therefore a source of large evaporative water losses. However, recent studies indicate that swamps in the Nile basin may in fact be fed by groundwater. Evaporation from the swamps may, therefore, play a less important role in the water budget of the rivers and lakes. Yet, evaporation from larger swamps such as the Sudd may be a significant source of moisture for regional precipitation such as in the Ethiopian Highlands. Substantial changes in wetland surface area may also impact the atmospheric water cycle and precipitation regime as a result of changes in soil wetness and land-atmosphere interactions. Thus, information about the role of groundwater, in particular its contribution to water balances in lakes, rivers, and wetlands is crucial for determining equitable and appropriate water allocations and water resource management strategies. The development objective of the project is to provide the scientific basis and necessary institutional and policy support for incorporating a groundwater dimension into planning and management of the Nile basin ecosystem as an essential component of sustainable development of the Nile Basin. In support of the development objective there are four immediate objectives: a)improve the assessment of groundwater-surface water interactions towards strengthening protection of key ecosystem resources as well as the gains from and losses to groundwater on rivers and lakes in the Nile basin; b)enhance the characterization of the role of groundwater in wetlands and of the Sudd Swamps in the regional water cycle; c)improve the use of water balance models in estimating basin-wide annual and monthly water balances in the Nile basin as an input to water planning and management; d)Facilitate the inclusion of groundwater considerations into integrated Nile basin water resources planning and management activities and to ensure a common understanding of groundwater issues and analysis among the riparian countries.